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Flowers Foods and Deutsche Bank’s Share Repurchase Agreement

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Nov. 20 2020, Updated 3:53 p.m. ET

Price movement 

Flowers Foods (FLO) has a market cap of $3.9 billion. It rose by 0.72%. It closed at $18.29 per share as of March 16, 2016. The price movement on a weekly, monthly, and YTD (year-to-date) basis is 3.2%, 13.9%, and -14.2%, respectively.

Currently, Flowers Foods is trading 6.3% above its 20-day moving average, 3.4% below its 50-day moving average, and 16.4% below its 200-day moving average.

The Vanguard S&P Mid-Cap 400 Value ETF (IVOV) invests 0.70% of its holdings in Flowers Foods. IVOV tracks an index of primarily mid-cap US stocks. The index uses three factors to select value stocks from the 400 stocks chosen by the S&P Committee. IVOV’s YTD price movement was 2.3% as of March 15, 2016.

The SPDR S&P 400 Mid-Cap Value ETF (MDYV) invests 0.60% of its holdings in Flowers Foods. MDYV tracks a market-cap-weighted index of US stocks. The index uses three factors to select value stocks from the 400 stocks chosen by the S&P Committee.

The market caps of Flowers Foods’ competitors are as follows:

  • Campbell Soup (CPB) – $19.9 billion
  • Panera Bread (PNRA) – $5.2 billion
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Flowers Foods’ share repurchase agreement

Flowers Foods entered into an accelerated share repurchase agreement with Deutsche Bank AG. It will repurchase an aggregate of $120 million of its common stock. It expects the impact of share repurchase on the EPS to be $0.02–$0.03 per share.

Performance in fiscal 4Q15 and 2015

Flowers Foods reported fiscal 4Q15 sales of $858.4 million—a fall of 2.2% compared to sales of $877.3 million in fiscal 4Q14. Sales of direct-store delivery fell by 3.7% and sales of warehouse delivery rose by 6.1% in fiscal 4Q15—compared to fiscal 4Q14. It reported an impairment of assets of $1.5 million in fiscal 4Q15—compared to $5.8 million in fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $32.2 million and $0.15, respectively, in fiscal 4Q15—compared to $28.0 million and $0.13, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, Flowers Foods reported sales of $3,778.5 million—a rise of 0.79% year-over-year. Its net income and EPS rose to $189.2 million and $0.89, respectively, in fiscal 2015—compared to $175.7 million and $0.82, respectively, in fiscal 2014.

It reported cash and cash equivalents and long-term debt of $14.4 million and $1,243.1 million, respectively, in fiscal 2015.

The company repurchased 0.3 million shares at an average price of $21.54 per share. There are 13.7 million shares remaining on its share repurchase program.

Flowers Foods’ price-to-earnings and price-to-book value ratios are 20.6x and 3.1x, respectively, as of March 16, 2016.

For ongoing analysis, you can visit Market Realist’s Consumer Discretionary page.

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